1 year vs 2 year

Nitish Jain

An MBA is a degree for those who wish to transition from functional manager to a general manager. Ideally, the student should have at least 5 years of work experience to make the most of the program. Let's first consider what gets covered in an MBA.

An MBA typically trains the mind to look at issues in a systematic way to make lasting high quality decisions. It includes training the mind to ask the right questions to frame issues, remove the noise surrounding the real issues, develop analytical skills and be able to synthesise to put it all together. This includes developing a 360-degree understanding of most functional areas. So, even if you have been focussed on say IT, you now learn accounts, finance, marketing, people management, and much more, helping you make decisions holistically. The focus is strategic.

Now consider that a 2-year program usually has a 4-month-long summer break, 2 winter breaks of 1 month each and finishes after 20 months, not 24 months. So, in reality a 2-year program has just 2 extra months of classes compared to a 12-month program. Let's analyse what the cost benefit for the extra 2 months is.

The first summer break is when most students do an internship. The question is - does someone with over 5 years of work experience really benefit from an internship? Of course, an internship is always useful, but the alternative is a full-time job at the end of 12 months.

The cost of a 2-year program is considerable higher than that of a 1-year program. Living costs are double but the opportunity cost is even higher. Consider 2 students who start an MBA in 2020: one opts for a 1-year program and the other, a 2-year program. The first student returns to the workforce in 2021 and would have had a full year's earning while the 2nd student is still competing their MBA. When you consider ROI, it should really be done at the end of the 2nd year by which time a substantial part of the fees has already been recovered for the student in the 1-year program. It is surprising that even now, students evaluate ROI of both 1-year and 2-year programs as salary/fees not considering the extra year. In the workplace, the first student has the advantage of having an additional year of work experience.

Forbes has 2 rankings - one for 2-year MBA programs and one for 1-year programs. The 1-year MBAs have a higher ROI than 2-year programs. European business schools have historically offered 1-year programs. Their American counterparts are fast moving to 1-year programs too. Cornell, Wharton and most schools now have a 1-year option.

That's not to say that 2-year programs are not without their advantages though. They are designed for those who don't want to go all out and study all 12 months. 1-year programs are designed for very ambitious students who don't mind studying extra hard to gain a year at work. But it isn't for all students. Students need to decide which duration suits their needs. Luckily they have a choice!

— The writer is President, S P Jain School of Global Management

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